The Board of Directors of the Federal Deposit Insurance
Corporation (FDIC) today proposed requiring banks and thrift
institutions with less-than-satisfactory Year 2000 ratings as of
July 31, 1999, to maintain key deposit and loan information using a
standard format at year end.

"Banking regulators have been working with financial
institutions for two years to prepare for the century date
change," said FDIC Chairman Donna Tanoue. "As a result, we
expect virtually all financial institutions to be prepared for the
transition.

"Since we are required to plan for the remotest contingency,
however, the FDIC must make sure that depositors have the quickest
possible access to their money in the unlikely event that a
financial institution experiences significant Year 2000
difficulties," Chairman Tanoue added. "The FDIC is taking
this step out of an overabundance of caution, because we have the
job of developing contingency plans in case anything unexpected
occurs  however remote that possibility."

The proposed rule would apply only to a small number of financial
institutions. At present, more than 98 percent of insured
institutions are rated "satisfactory" in regard to Y2K
preparations. Since the end of March, the number of banks and thrift
institutions rated less than satisfactory has declined from 357 to
205, out of a total of 10,400. The FDIC expects the number of
less-than-satisfactory institutions to continue to decline
throughout the year. Any institution that receives a satisfactory
rating after July 31 would not be required to participate in the
program.

Banks and thrifts  and the companies that provide data
processing services to them  routinely maintain backup copies
of the data stored in their systems. Many different versions of
business systems are in use today -- there is no standardized method
of maintaining backup data. As a result, it takes a good deal of
time and effort to translate and convert data from one system to
another. The standardized backup programs required by the proposed
rule would reduce the time needed to retrieve, translate and
transfer information about accounts should a financial institution
need the help of another data processor or be placed in
receivership.

Standardized data would also promote continuity of customer
services by supporting an open bank's transfer of key account
information to a Y2K-compliant replacement data processor, asset
servicer, or purchasing institution, should that become necessary.